Ballmer has his work cut out. He needs to make Microsoft an Internet player without jeopardizing its desktop monopolies, restore customers’ faith in Windows after Vista sapped it, and imbue the company with a sense of direction after its failure to reel in Yahoo. Microsoft continues to mint money, bringing in about $1.8 billion monthly in cash. But in a world where software is moving from the PC to the Web, the company is being outmaneuvered by Google. Microsoft’s ad unit is bleeding cash, and its search sites accounted for just 8.3% of U.S. users’ queries in August. Buying Yahoo was supposed to help, but now Ballmer likely will need to chart a new course—without daily help from Bill Gates, who retired in June.

2. The Marshall:

Mitchell Baker

mozilla.org

When Baker, the “Lizard Wrangler” at the Mozilla Foundation, launched the Firefox browser four years ago, Microsoft’s Internet Explorer was in her sights. Baker’s overarching goal was to keep the Web open. Now, Firefox’s market share has risen to nearly 20% while IE’s has slipped from 95% to 72%, and most Web sites treat all browsers equally. These days, Mozilla is faced with a threat of its own: Google’s Chrome browser, which launched Sept. 1. Baker says the new browser on the block “forces us to do our best.” Mozilla’s latest foray is into mobile browsing.

3. The Innovator:

Jeff Bezos

amazon.com

By sending Amazon’s stock to all-time highs during the past year, Bezos effectively hushed critics who worried that the company was spending too much on technology and shipping discounts. Now, the company he founded 14 years ago is firmly focused on exactly the kind of new ventures that Bezos relishes. Whether it’s the Kindle e-book or cloud computing services aimed at businesses that want to store data and their operations on Amazon’s massive server farms, Bezos is committed to developing new kinds of revenue streams for the digital future.

4. The Searchers:

Sergey Brin, Larry Page, and Eric Schmidt

google.com

The Google executive triumvirate, with Schmidt as CEO and co-founders Brin and Page as respective presidents of technology and products, works as a seamless team at the top of the search giant. Up to now, their key task has been to manage the breakneck growth of the company, now comprising more than 18,000 employees and expecting $16.2 billion in sales this year, up 53%. Even the declining economy has not yet seemed to slow its dominance in Web search and search-based advertising. But that very success is creating challenges, namely a backlash against their increasing power online from competitors, advertisers, and government regulators. Now, their main job will be convincing the world they mean it when they spout their informal corporate motto, “Don’t be evil.”

5. The Investor:

Jeff Clavier

softtechvc.com

A onetime angel investor in more than Web 2.0 startups, Clavier last year started a bona fide venture capital firm, SoftTech VC in Palo Alto, Calif. The French native has none of the press star power of better known VCs such as Sequoia Capital’s Michael Moritz or John Doerr of Kleiner Perkins Caufield & Byers, but Clavier is the one all the newly minted entrepreneurs are flocking around at countless Web 2.0 conferences. For good reason: Clavier has an eye for fast-rising startups, such as news feed aggregator NetVibes, personal-finance service Mint, and social advertising network SocialMedia. And five of his startups had successful “exits” through acquisition by the likes of Yahoo, AOL, and others.

6. The Papa Bear:

Paul Graham

ycombinator.com

Graham, a computer programmer turned author, developed a devoted following among would-be tech entrepreneurs with his essay “How to Start a Startup.” Several years ago, he put his money where his mouth was, launching Y Combinator, a venture firm that incubates technology companies. Twice a year, the firm provides seed money, typically $20,000 or less, to help select young entrepreneurs bring their ideas to life. Social news site Reddit is among the most successful Y Combinator companies, having been acquired by Condé Nast Publications in 2006.

7.The Muckracker:

Arianna Huffington

huffingtonpost.com

As election day draws nigh, Huffington’s liberal political blog The Huffington Post has become a must-read for the Washington media as well as left-leaning voters. More than 8 million people per month reportedly visit the site, which includes commentary, discussion of breaking news stories, and political coverage. Huffington, a Cambridge University grad and author of 12 books, steers the conversation in the mainstream media with what she focuses on in her blog and during her frequent public appearances. Her next venture? Local news. In June, Huffington announced plans to launch a local news aggregation site for major metropolitan areas.

8.The Adviser:

Joi Ito

joi.ito.com

When Joichi “Joi” Ito speaks, the digerati listen. The onetime college dropout and nightclub DJ has become one of the Web’s leading thinkers and writers on a number of cutting-edge technologies, from online multiplayer games such as World of Warcraft to social networks. The Japanese native is also an entrepreneur, angel investor in companies such as Flickr (later acquired by Yahoo) and Six Apart, and board member at companies such as corporate collaboration firm Socialtext and blog tracker Technorati. Currently, among his seemingly endless list of activities, he’s CEO of the nonprofit group Creative Commons, which helps authors, artists, and others easily mark how they’d like their work to be used online.

9. The Mastermind:

Steve Jobs

apple.com

Having brought Apple back from the brink of a premature death following his return to the CEO’s office in 1996, Jobs has revolutionized how we consume media of all kinds, whether music, TV shows, and movies. Itunes is now the biggest retailer of music, be it digital or tangible—in the U.S., having sold 5 billion songs as of June. Since 2007 he’s turned his attention to the wireless world, challenging entrenched players like Motorola and Research In Motion with the iPhone.

10. The Filmer:

Jonathan Kaplan

theflip.com

Here’s a familiar scenario: Buy a video camera when the first child comes along. Take loads of video. Stick tapes in a drawer. Shelve camcorder until the next child is born. Pure Digital Technologies CEO Kaplan set out seven years ago to turn that old saw on its head. The company’s $130 Flip video camcorder, a compact device where you simply frame your subject in a small screen and press a button to record, made it so easy to shoot video and upload it to a PC or YouTube that even a child can use it. Flip’s astounding success has turbocharged video sharing online—and in the process it forced Sony, Samsung and others to create a slew of easy-to-use devices that will compete with it.

11. The Communicator:

Loic Le Meur

Leweb3.com
seesmic.com

Le Meur is a compulsive communicator. And that has served him well. He has run a string of startups, founded a popular conference in Paris called Le Web that brings together bloggers from around the world, and started one of the most popular blogs in France. Right now, few people are more rabid about the possibilities of Twitter and its short burst of communications than Le Meur. He parlayed that obsession into a startup, Seesmic, a sort of video version of Twitter, where people can post short videos and react to each other’s clips. But mostly, it’s Le Meur’s irrepressible enthusiasm for all things Internet that has made him someone to watch.

12. The Trader:

Jack Ma

alibaba.com

For many Chinese entrepreneurs, Ma is a hero. A former school teacher, Ma, 43, is the founder and CEO of the Alibaba Group, China’s premier e-commerce player. The company, headquartered in Ma’s hometown, the eastern Chinese city of Hangzhou, controls Yahoo China and Taobao, the country’s top consumer Web site. The flagship of the group is Alibaba.com, a business-to-business service that connects small and midsized importers and exporters in China with counterparts worldwide. Ma successfully guided Alibaba’s $1.5 billion Hong Kong initial private offering last November and is now using that cash pile to expand into new markets in Japan, India, and Korea.

13. The Publisher:

Matt Mullenweg

WordPress.org

As the importance of social media expands, so does the influence of WordPress, the blogging service that most serious bloggers turn to. And though blogging might seem well established, WordPress just keeps on growing. Open source software is part of the reason for WordPress’ success. When Mullenweg started blogging in 2001, he used open source software to develop his own Web tools, which became WordPress. Traffic to WordPress’ service more than doubled during the last year to 103 million global visitors, compared with main rival Typepad’s 20 million.

14. The Mogul:

Rupert Murdoch

myspace.com

Murdoch made his career—and billions—developing media properties into powerhouses. He’s aiming to do it again with MySpace, the social network he bought in 2005 for a mere $580 million. Under the ownership of News Corp. (NWS), MySpace has morphed from a site where users post messages to friends and listen to unsigned bands into a full-fledged Web portal for entertainment content that pulls in an estimated $800 million per year in revenue. The site, which has more than 117 million users worldwide, has signed deals to distribute television shows and original programming and, this September, launched MySpace Music—a joint venture with the four major record labels and Indie players. Now Murdoch’s challenge is to turn all the traffic and premium content into ad buys capable of competing with the likes of Yahoo.

15. The Community Organizer:

Craig Newmark

craigslist.com

The former Charles Schwab Internet consultant started Craigslist in 2004 to help people connect and publicize events. The site has since dramatically altered the classified advertising universe and the business model of local newspapers with its largely free want ads and “for sale” postings. But don’t ask Newmark how much the site is capable of raking in. Newmark insists that he’s not in it for the money and, after a company employee sold a 25% stake to eBay, has filed suit over what he describes as the e-commerce giant’s relentless attempts to turn the site into an eBay business.

16. The Traffic Driver:

Gabe Rivera

techmeme.com

Rivera’s Techmeme has fast become the tech news source of record by aggregating the top industry news from more than 1,000 blogs and mainstream media sources in one convenient location. Unlike Digg and other community edited sites, the ad-supported site is entirely automated. Rivera tweaks the algorithms, but the prominence of stories is all based on links and blog buzz, among other things. Last year the site launched a “leader board” to show the news sources that most frequently have their stories posted on the site.

17. The Poster Boy:

Kevin Rose

digg.com

The founder of Digg is one of the most well-known faces of the new Web elite. That’s partly because the computer-science dropout from the University of Nevada-Las Vegas changed the way millions of people each month get the news, taking power from front page editors and giving it to people who submit and vote for stories on Digg.com. The site, which has somewhere between 10 million and 22 million visitors a month, depending on who you ask, has a dedicated fan base. But Rose’s high recognition factor is mostly because the 31-year old can’t get out of the news and away from rumors of Digg’s imminent sale to Google or Microsoft.

18. The Adult:

Sheryl Sandberg

facebook.com

Since Mark Zuckerberg co-founded Facebook in his dorm room at Harvard University, the social networking giant has been dominated by a freewheeling culture of young, mostly male computer engineers. That all changed in April when the company hired former Google executive Sandberg to become Facebook’s chief operating officer. Sandberg, 38, was brought in to provide some adult supervision and help Silicon Valley’s hottest startup to grow up—and make oodles of money. If anyone can figure out how to capitalize on Web 2.0, it’s Sandberg. As vice-president of global online sales and operations at Google, she oversaw huge growth in its international operations and managed its lucrative advertising business. As COO, Sandberg will be responsible for helping Facebook scale its operations and build its business model.

19. The Edutainer:

Jon Stewart

thedailyshow.com

With the 2008 election, Stewart is increasing his influence exponentially this year. And a big part of the reason why is the Web. After some messy quarrels with YouTube over illegal copies running on the video service, Comedy Central, which produces The Daily Show, finally started putting all its shows up for free on its own Web site and allowing people to share them. With more people than ever turning to the Web for news and videos, The Daily Show has become the place where many claim to be getting their best coverage of the elections. So while Stewart wasn’t a pioneer in going online, his embrace of the Net is an example of good timing.

20. The Money Man:

Peter Thiel

clariumcapital.com
thefoundersfund.com

One of the most prominent members of Silicon Valley’s PayPal mafia (a group of savvy entrepreneurs who emerged from the online payment firm), Thiel has invested in some of the hottest startups through The Founders Fund. Thiel started the venture capital fund, adapting to Web 2.0 entrepreneurs who don’t need much money to get off the ground and don’t want to give up big chunks of their companies. Thiel’s investments include Facebook, Slide, and Yammer. Still, Thiel does much more than focus on startups. After selling PayPal to eBay, Thiel left to found Clarium Capital Management, a global macro hedge fund that now manages more than $7 billion in investments.

21. The Crafter:

Maria Thomas

etsy.com

Etsy is a happening little company with a lot of promise. The three-year-old site, where people buy and sell homemade arts and crafts, last year sold $27 million in goods with very little marketing. Its secret? Hitting a chord with people who are tired of the ordinary and the mass produced. Thomas’ job is to let more people aware that Etsy is the alternative they didn’t know was there for them. She has plenty of experience building new models on top of old habits. As the Vice President and General Manager of NPR, she spearheaded the organization’s wildly popular and innovative podcasting offerings. Now Thomas, a onetime exec at Amazon, is back at her e-commerce roots.

22. The Advocate:

Anssi Vanjoki

nokia.com

Nokia (NOK) veteran Vanjoki is the most visible advocate for the Finnish handset maker’s transition from hardware manufacturer to provider of mobile Internet services. As executive vice-president, markets, Vanjoki is responsible for convincing consumers as well as business partners that Nokia’s devices are useful for much more than talking and occasionally snapping a photo. The “multimedia computers,” as Vanjoki likes to call Nokia smartphones, are becoming gateways to the Internet and services such as social networking, music downloads or navigation. Nokia will need all the determination that the hard-driving Vanjoki, who hunts bear in his spare time, can muster. It’s directly taking on Apple, Google, and Research in Motion.

23. The Crowd Sourcer:

Jimmy Wales

wikia-inc.com/wiki/wikia

Wales is best known as the founder of Wikipedia, a community edited online encyclopedia that has grown from a niche site in 2001 to the source of all things pop culture. It is ranked by Web rating service Alexa as one of the top 10 popular sites in the world. But Wales would like also to be known as the force that bested Google at its own game. Wales has started the for-profit company Wikia Inc., which includes an open source search engine named Wikia Search. The project has received more than $4 million in funding from Bessemer Venture Partners and the Omidyar Network.

24. The Blogger:

Evan Williams

twitter.com

Williams has a knack for figuring out how people want to keep in touch—even before they seem to know it themselves. In 1999 he launched Blogger, a service that allows people to post their every thought online. That turned anyone with a computer into a global publisher. After selling Blogger to Google, Williams created a podcasting startup named Odeo that didn’t take off. But in the meantime, Jack Dorsey, an employee at Williams’ company, came up with Twitter. Twitter has popularized microblogging, the streams of short posts people write to groups of friends. During the past two years, the popularity of Twitter has exploded, as people turn to new ways to stay in touch.

25. The Fighter:

Jerry Yang

yahoo.com

Still embattled after a bruising five-month campaign that repulsed Microsoft’s $45 billion takeover bid, Yahoo! (YHOO) CEO and co-founder Yang must find ways to recharge growth at the struggling Internet portal. Despite speculation that Yahoo might be interested in buying Time Warner’s AOL unit, Yang is publicly banking on new services such as a display-advertising system announced on Sept. 24. But activist investor Carl Icahn and two of his cohorts on Yahoo’s board, along with many other shareholders, still favor a deal with Microsoft. Meantime, regulators are scrutinizing a proposed search ad deal with Google that Yahoo says would bring in $800 million a year. So Yang’s running room is short. And with the economy already slowing the growth of Yahoo’s mainstay display advertising revenues, his effort to keep Yahoo independent faces steep odds.